r 


Library 

UNiyERSITY  OF 
CALIFORNIA 
SAN  0IE6O 


■^ 


J 


THE  UNIVERSITY  EIBRAT?? 
UNIVERSITY  OF  CALIFORNIA.  SAN  DIEGQ 

SOME   ASPF  C*^f  ^'-'^' ^^'-'^^^'^'^ 


Ol-    THE 


MO:^^EY  QUESTION. 


^^  ^:j 


WILLIAM  M.  DICKSON, 

OF    THE    CIXCIXNATI    BAR. 


CINCINNATI : 
KOBERT  CLAEKE  &  CO.,  PRINTERS, 

1877. 


I 


CONTENTS. 


PARE. 

Introduction 5 

Inflation 7 

The  Policy  of  a  Gradual  Rktukn  to  Specie  Payments 13 

A  Money  Panic  when  Irredeemable  Paper  is  the  Money 21 

Matthews  on  Money 24 

Taft  and  Groesbeck  on  Silteb 29 


ll 


INTRODUCTION. 

The  worst  legacy  of  modern  war  is  the  debt  which  it  leaves. 
The  horrors  of  the  stricken  field  are  soon  effaced;  the  wasted 
places  bloom  again  ;  the  mourners  cease  to  mourn,  and  the 
reproductive  powers  of  nature  fill  up  the  gaps  made  by  the 
sword  ;  but  the  debt  is  abiding.  The  destruction  of  life  and 
property  to  Prussia  in  the  seven  years'  war  has  hardly  been 
exceeded,  yet  in  the  life  of  the  great  Frederic  she  became  more 
prosperous  than  ever.  He  made  no  debt.  The  losses  of  our  war 
have  in  great  measure  been  repaired  ;  even  the  passions  which 
produced  it  and  which  it  augmented  are  almost  still ;  but  the 
debt  it  caused  presses  upon  us  with  increasing  weight. 

It  is  not  surprising  then  that  there  is  a  growing  desire  to 
be  relieved  from  it — a  disposition  upon  the  part  of  many  to 
catch  at  any  device  or  shift  which  may  be  suggested  to  lessen 
its  weight.  Men  greedily  avail  themselves  of  a  legal  quibljle 
to  escape  the  obligation  who  would  be  shocked  at  a  suggestion 
of  open  repudiation. 

Soon  after  the  close  of  the  war  it  was  proposed  to  pay  off 
the  bonded  debt  with  greenbacks.  The  law  of  the  greenback 
made  it  a  legal  tender  for  all  purposes  except  payment  of 
customs ;  therefore,  it  might  be  used  in  payment  of  the 
bonded  debt.  The  absurdity  that  a  promise  to  pay,  with  in- 
terest, may  be  paid  by  another  promise  of  the  debtor  to  pay, 
without  interest,  without  the  consent  of  tlie  creditor,  is 
apparent ;  yet  men  who  consider  themselves  honorable  advo- 
cated this  wretched  quibble. 

Again,  an  indefinite  further  issue  of  greenbacks  was  pressed, 
in  the  hope,  doubtless,  that  the  bond  would  be  swamped  in 
the  inevitable  financial  collapse  that  would  come.  And  last, 
the  fall  of  silver  gives  opportunity  to  cavil  with  the  cred- 
itor ;  the  quibble  being  that  the  bonds  are,  by  the  law  of  their 


VI  INTRODUCTION. 


creation,  payable  in  coin,  that  is,  gold  or  silver,  at  the  op- 
tion of  Government.  The  fact  that  Government  has  exercised 
this  option,  in  the  act  demonetizing  silver,  is  shoved  aside,  as  is 
also  the  fact  that  immense  credits  have  been  made  upon  the 
faith  of  this  demonetization,  as  to  which  the  remonetizing  of 
silver  on  the  old  basis  would  act  as  a  partial  repudiation. 

The  letters  herewith  republished,  were  originally  published 
in  the  Cincinnati  Commercial^  from  time  to  time,  as  the 
matters  of  which  they  treat  occupied  the  public  attention. 

The  Congress  noAv  in  session  is  likely  to  be  beset  with  these 
schemes,  and  hence,  the  present  issue  of  these  letters  may  be 
opportune — if  happily  they  may  contribute  something  toward 
arresting  the  present  fatal  downward  tendency.  The  motive  is 
not  to  serve  the  creditor  but  the  maintenance  of  plighted  faith, 
yet  this,  secure,  in  the  end  best  serves  both  debtor  and  creditor. 
Much  less  is  the  motive,  the  vain  desire  of  obtaining  "  the  inter- 
ested and  insincere  applause  of  the  creditor;"*  still,  as  we  are 
seeking  to  reduce  the  burden  of  our  debt  by  funding  it  at  re- 
duced rates  of  interest,  homely  thrift  would  seem  to  suggest  the 
propriety  of  our  doing  those  things,  which  would  advance  our 
credit.  The  frothy  rhetoric  of  the  report  of  the  Silver  Commis- 
sion about  our  good  faith  heretofore  is  hardly  becoming  iu  so 
grave  a  state  paper.  If  it  be  made  the  excuse  for  a  lapse  at  this 
time  from  that  good  faith,  it  is  also  offensive  to  good  morals. 

Of  the  same  character  is  the  covert  allusion  to  possible  worse 
consequences  to  the  creditor  if  he  does  not  yield,  because  the 
original  debt  was  contracted  upon  terms  hard  upon  the  Govern- 
ment. For  £600,000,000  of  the  debt  of  Great  Britain,  she  origin- 
ally received  only  60  or  70  per  cent,  thereof,  yet  she  has  never 
made  use  of  this  fact  as  a  threat  of  evil  consequences  if  the 
creditor  did  not  yield  to  some  proposed  adjustment  of  the 
Government. 


♦Silver  Commission  Rei:)ort. 


I 


SOME  ASPECTS 


MONEY    QUESTIOISr. 


Messrs. 


INFLATION. 

April  18,  1874. 


Gentlemen — You  have  given  the  public  the  benefit  of  your 
opinion  in  behalf  of  inflation.  You  assign  no  reason  for  the 
faith  that  is  in  you.  Yet  you  advise  the  public  that  you  are 
manufacturers,  numbering  more  than  fifty,  and  representing 
a  capital  of  $10,000,000  and  more  than  5,000  em[>loyes.  We 
will  admit  that  all  this  may  be  true,  and  yet  3^our  opinion  be 
wholly  erroneous.  You  only  mean  to  intimate  that  in  your 
opinion  inflation  is  a  necessity  at  this  time  to  your  capital, 
your  employment  and  your  employes.  You  thus  invite  the 
inquiry  how  can  inflation  serve  you,  circumstanced  as  you  are  ? 

You  will  admit  that  an  increase  of  currency  depreciates  the 
purchasing  power  of  its  unit,  that  if  there  be  at  a  certain  time 
a  hundred  millions  of  money  in  the  country  and  there  be 
added  to  this  another  hundred  millions,  the  dollar  will  not 
buy  as  much  after  this  increase  as  it  did  before.  In  other 
words,  money,  like  any  other  commodity,  follows  the  law  of 
sup[»ly  and  demand. 

All  this  is  true  of  actual  money,  gold  and  silver,  and  is 
likewise  true  of  fictitious  money,  paper  credit.  But  with 
this  latter  there  enters  in  another  element,  causing  greater  de- 
preciation. The  value  of  paper  money  rests  upon  the  expec- 
tation that  it  will  some  day  be  paid  with  actufil  money ;  but 
whether  this  will  ever  take  place  depends  upon  the  ability 
and  honesty  of  him  who  issues.-  Every  addition  to  the  paper 
of  an  individual  or  of  a  nation,  makes  an  additional  tax  upon 

*  Certain  citizens  of  Cincinnati. 

(7) 


8  INFLATION. 


his  or  its  resources,  and  increases  the  uncertainty  as  to  the 
payment  of  what  he  or  it  owes.  "When  the  issue  of  paper  be- 
comes reckless,  there  arises  the  apprehension  that  there 
is  no  purpose  to  pay.  All  this  combines  to  produce  a  rapid 
depreciation  of  paper  when  its  volume  is  increased. 

You  must  then  admit  that  when  you  vote  for  inflation  you 
deliberately  ask  that  the  i)urchasing  capacity  of  our  paper 
dollar  shall  be  decreased ;  you  ask  the  Government  so  to  act 
as  to  make  the  dollar  you  give  your  employe  for  his  hard 
work  buy  less  bread  and  meat  than  it  does  at  this  time. 

Now,  why  do  you  want  the  purchasing  capacity  of  the  dol- 
lar decreased?  In  what  way  will  this  benetit  your  business, 
your  capital  or  your  employes  ? 

Let  us  suppose  your  request  granted,  and  that  inflation 
takes  place  to-morrow.  What  effect  will  it  have  upon  your 
wares?  You  will  rise  up  to-morrow  morning  and  proceed  to 
your  business  knowing  that  the  inflated  dollar  is  not  worth 
what  it  was  the  daybefoi'e;  how  much  less  you  are  hardly 
able  to  tell.  Eut  one  thing  you  will  not  do  :  you  will  not  sell 
your  wares  at  the  same  price  you  did  the  day  before.  You 
will  want  more  dollars  for  them.  Thus  there  is  an  apparent 
rise  in  the  price  of  your  wares,  and  this  is  gratifying. 

But  how  will  this  beneflt  you? 

If  you  are  in  debt  the  benetit  is  quite  obvious.  Let  us  sup- 
pose an  extreme  case  of  inflation — of  an  increase  of  the  money 
so  great  that  a  dollar  of  the  inflated  currency  sinks  to  tifty 
cents  of  its  value  before  inflation,  or  which  is  the  same  thing, 
let  us  suppose  that  you  can  readily  sell  a  stove  for  fifty  dol- . 
lars,  which  before  inflation  you  were  glad  to  sell  for  twenty- 
five  dollars.  You  thus  gain  by  inflation  twenty-tive  dollars 
on  your  stove.  Your  stove  now  pays  your  creditor  fifty  dol- 
lars of  your  debt  to  him,  while  before  inflation  it  only  paid 
him  twenty-five  dollars — a  clear  gain  to  you  of  twenty-five 
dollars,  and  a  clear  loss  to  him  of  a  like  sum.  For,  before  in- 
flation, the  fifty  dollars  you  owed  him  would  buy  two  stoves  ; 
now,  after  inflation,  it  will  buy  only  one  stove.  By  inflation 
you  have  cheated  him  out  of  one  stove. 

Gentlemen,  manufacturers,  if  you  are  heavily  in  debt,  and 
want  to  defraud  your  creditors,  it  is  obvious  your  nefarious 


INFLATION.  9 


purpose  will  be  aided  by  iufhitioii,  Now,  is  this  tlie  case? 
Are  you  in  debt,  and  do  you  want  to  rob  your  creditors? 
We  do  not  believe  this.  We  believe  neither  proposition. 
We  believe  you  are   solid  and  honest. 

But  do  you  not  see  that  your  action  throws  a  suspicion 
on  you  ? 

You  must  admit  that  inflation  depreciates  the  value  of 
the  dollar,  and  that  to  the  extent  of  that  depreciation  the 
creditor  is  defrauded.  As  honest  men,  is  it  morally  right 
for  you  to  ask  for  inflation  wiien  you  know  the  effect 
of  it  will  be  to  rob  3'our  creditor  neighbor  of  his  property? 
Assume  for  a  moment  that  the  inflation  does  benefit  your 
business,  is  it  right  for  you  to  seek  this  benefit  by  the  rob- 
ing of  your  neighbor  ? 

Kernember  that  every  time  you  cry  for  inflation  you  are 
lending  your  voice  to  the  robbery  of  another.  It  is  admitted 
even  with  hesitation  that  the  Government  may  under  the 
dire  necessity  caused  by  war,  to  save  the  life  of  the  Nation, 
make  its  promise  to  pay  a  legal-tender,  inflate  the  currency 
and  thus  permit  the  debtor  to  rob  his  creditor.  But  never 
before  in  the  history  of  a  civilized  Nation,  in  a  time  of  pro- 
found peace,  did  a  Government  commit  this  crime,  merely 
because  one  class  of  the  community  thought  that  it  could 
thereby  better  itself  at  the  expense  of  another.  The  very 
thought  is  shocking  to  the  moral  sense.  Yet,  gentlemen, 
this  is  precisely  what  you  are  requesting  our  Government  to  do. 

Pray  in  what  way  do  you  reconcile  your  conduct  to  your 
conscience!  Will  you  say  that  inflation  will  benefit  the 
country;  that  it  will  make  things  lively  and  business  brisk? 
Well,  is  it  right  to  make  your  business  brisk  by  the  robbery  ot 
anotiier  ?  But  will  it  make  business  brisk,  and  to  what  extent 
and  with  what  result?  All  this  is  very  vague.  Yet  let  us 
fairly  analyze  the  matter.  Let  us  return  to  our  illustration. 
Let  us  assume  that  inflation  will  take  })lace  to-nu)rrow. 
You  will  then,  as  we  have  seen,  ask  more  for  your  wares 
than  you  do  to-day.  Just  how  much  you  can  not  tell.  You 
know  there  will  be  an  advjince,  but  to  what  extent  you  can 
not  precisely  tell.  You  do  not  know  the  level  of  prices  ad- 
justed to  the  inflated  currency,  but  you  know  there   will   be 


10  INFLATION. 


lui  advance  and  yon  increase  yonr  prices  for  yonr  wares  can- 
tionsly  at  first.  Your  customer  admits  there  must  be  an  in- 
crease, concedes  the  point  to  you,  pays  your  advance — and  in 
turn  advances  upon  Lis  customer  in  the  same  way  you  do, 
and  so  on  with  each  successive  exchange.  Each  one  of  you 
has  realized  an  advance,  and  if  you  use  it  to  pay  your  debts 
you  have  made  a  gain  and  robbed  your  creditor. 

If  you  have  many  debts  to  pay,  and  can,  by  a  twenty-live- 
dollar  stove,  pay  a  fifty-dollar  debt,  no  doubt  you  will  be  brisk 
in  your  business;  but  we  assume  you  are  honest,  and  that  the 
brisk  trade  you  refer  to  is  not  of  this  character.  Each  one  of 
you  has  realized  an  advance,  and  apparently  made  money, 
but  when  you  come  to  replace  your  stock  you  find  that  it  has 
advanced  too,  that  labor  has  advanced,  so  that  the  increased 
amount  of  money  you  have  got  buys  no  more  than  the  less 
amount  before  inflation.  It  is  quite  true  that  all  these  ad- 
vances do  not  take  place  at  once.  You  will  continue  to  pay 
your  employes  at  the  same  wages  for  some  time  after  you 
have  increased  your  prices.  It  will  be  some  time  before  they 
will  strike,  and  to  that  extent  you  are  a  gainer.  But  you 
have  to  that  same  extent  robbed  your  employes.  As  honest 
men,  would  you  do  that,  and  if  not  as  honest  men,  would  you 
recommend  a  line  of  policy  which  would  enable  dishonest 
men  to  do  it?  But  if  you  do  not,  where  is  your  gain  by  a 
brisk  business?  You  sell  your  wares  at  higher  prices  and 
you  pay  correspondingly  higher  prices  for  everything  you 
buy.  Yet  it  is  true  that  while  you  do  not  gain  anything, 
business  is  brisker.  While  you  are  selling  at  an  advance  to 
your  customer,  and  so  on,  A,  standing  by,  sees  these  profits 
and  inquires,  "  May  I  not  make  something?"  He  goes  to  his 
banker,  borrows  money,  now"  abundant,  and  buys  and  sells ; 
and  when  he  sells  at  an  advance  and  pays  his  borrowed 
money,  the  margin  left,  after  payment  of  interest,  he  has 
made.  This  everybody  sees  and  everybody  borrows  money 
and  buys  and  sells.  Prices  keep  on  swelling,  naturally,  until 
the  level  in  the  depreciated  currency  is  reached,  but  it  does 
not  stop  there ;  the  impetus  of  speculation  carries  it  far  be- 
yond that.  But  at  last  the  maximum  is  reached  and  prices 
swell  no  more.     Those  who  have  last  bought  can  not  sell,  and 


INFLATION.  11 


speculation  suddenly  comes  to  a  standstill.  Those  who  are 
caught  hope  against  hope,  hold  on  in  the  face  of  a  declining 
market,  and  seek  renewals  of  their  paper.  But  now  the 
bankers  take  the  alarm,  call  in  their  loans  and  sacrifice  the 
unfortunate  operators.  ]>ankru[)tcics  take  place  right  and 
left.  Prices  sink  lower  and  lower,  far  below  the  level  of  the 
depreciated  currency,  confidence  is  gone,  banks  and  everybody 
hoard  the  money;  there  becomes  a  tight  money  market;  the 
cry  goes  out :  We  want  more  money ;  business  lias  increased, 
more  money  is  wanted.  Demagogues  take  it  up,  Congress 
will  be  appealed  to,  another  inflation  takes  place,  with  a  like 
result,  and  the  thing  is  repeated  until  the  volume  of  the  Gov- 
ernment currency  has  become  so  great  that  it  can  not  be 
paid,  is  repudiated  in  some  form  or  other,  and  the  country, 
through  dishonor  and  business  convulsions,  comes  back  to 
gold  and  silver. 

But,  to  return,  what  have  you  gained  by  the  operation? 
There  are  three  ways  in  which  you  may  have  gained : 

You  may  have  paid  your  creditors  in  depreciated  money, 
and  defrauded  them  to  the  extent  of  the  depreciation.  You 
may  have  replaced  your  stock  at  a  less  price  than  it  was 
worth  in  the  depreciated  money,  and  you  may  have  for  a  time 
paid  your  emploj^es  at  the  old  }>riees,  and  to  the  extent  of  the 
depreciation  defrauded  them.  You  may  have  adroitly  or 
luckily  borrowed  and  bought  at  the  right  time,  and  sold  out 
at  the  right  time,  in  which  event  you  have  gained  at  the  ex- 
pense of  your  less  war}-  or  less  fortunate  neighbors.  Some 
one  at  last  is  caught.  In  each  and  every  event  your  gain  has 
produced  no  new  value,  and  has  been  solely  at  tlie  expense 
and  to  the  undoing  of  others.  Now,  gentlemen,  is  this 
honest?     Is  this  a  form  of  gain  in  which  you  can  delight? 

Perhaps,  however,  you  may  turn  up  in  the  outcome  among 
the  unwary  or  the  unlucky,  then  you  will  have  the  conscious- 
ness that  your  own  evil  action  has  wrought  your  own  undoing. 
Labor  alone  creates  values.  Neither  the  Government  nor  yoi^ 
can  do  this  by  shams  and  false  pretenses — and  the  attempt 
brings  onlv  dishonor  and  ruin.  Times  are  dull:  business  is 
depressed;  we  have  been  for  3'ears  in  a  declining  market j 


12  INFLATION. 


we  are  slowly  approaching  specie  payments,  and  that  road 
leads  to  no  gambling  s[)eculation,  l)ut  to  sober  industry. 

Without  interference  we  Avould  soon  reach  the  solid  rock 
of  gold.  Once  tiiere  from  the  throng  of  uncertainties  that 
crowd  upon  the  merchant,  one  at  least  would  be  removed. 
The  measure  of  values  would  be  stable  and  lixed,  and  which 
is  of  almost  equal  importance,  our  currency  would  be  that  of 
the  rest  of  the  world.  Now  we  are  atloat  upon  a  side  eddy, 
stagnant  and  foul,  while  the  great  and  pure  stream  of  cur- 
rency flows  by  us  around  the  world.  The  world's  currency 
has,  in  a  certain  and  valualjle  sense,  elasticity.  It  obeys  the 
laws  of  trade.  It  goes  from  where  it  is  not  wanted  to  where 
it  is  wanted.  It  is  in  restless  motion.  If  from  local  causes 
there  is  a  financial  crisis  in  a  country,  witli  loss  of  confidence, 
hoarding  and  high  rates  of  interest,  it  flows  there  and  brings 
relief.  No  such  relief  can  come  to  ns  now.  During  the  re- 
cent panic  gold  and  silver  came,  but  brought  no  relief.  They 
were  not  our  currency,  and  added  nothing  to  it.  They  were 
only  an  additional  commodity.  Our  only  relief  was  to  await 
the  slow  return  of  confidence  or  to  issue  more  greenbacks — a 
remedy  %vorse  than  the  evil. 

Gentlemen,  our  country  is  threatened  with  dire  calamity  ; 
its  honor  is  imperiled  ;  its  plighted  faith  is  about  to  be  broken. 
Your  felloW'-citizens  have  spoken  bmve  words  for  the  true 
cause,  and  you  throw  the  weight  of  your  names  into  the  op- 
posing scale  for  dishonesty.     Pause  !  think  ! 


RESUMPTION.  13 


THE     POLICY    OF    A     GRADUAL     RETURN    TO 
SPECIE   PAYMENTS. 

September  3,  1875. 

There  is  an  aspect  of  tlie  financial  (juestion  not  much  dis- 
cussed, yet  perhaps  it  is  the  most  important.  The  Democratic 
party  proclaiming  inflation,  the  Republican  party  deems  it  ex- 
pedient to  confine  itself  to  a  simple  negative. 

This,  however,  may  not  be  either  politic  or  wise.  The 
country  is  confessedly  suffering  from  wide-spread  business 
depression  ;  many  laborers  are  out  of  employment ;  others  are 
working  at  reduced  wages,  and  there  is  much  dii^tress.  Trade 
is  stagnant.  There  is  no  new  venture,  no  enterprise.  All 
seem  to  be  waiting  and  longing  for  relief.  Whatever  else 
maybe  said,  the  Democratic  party  meets  this  condition  of  the 
country  with  a  plan  of  relief,  immediate  in  its  action — the  in- 
flation of  the  currency.  This  is  delusive  and  destructive,  yet 
it  is  heralded  with  high-sounding  phrases,  and,  at  least,  holds 
the  word  of  promise  to  the  ear. 

The  Republican  party  proposes  no  ])lan  of  immediate  relief. 
It  has  "set  its  face  toward  specie  resumption,"  and  indicates 
when  that  is  reached  relief  will  come.  But  it  takes  no  step 
to  bring  this  about,  and  hesitates  to  declare  for  the  only  pol- 
icy which  will  bring  about  and  maintain  specie  resumption; 
the  withdrawal  of  the  greenback.  We  grew  away  from  spe- 
cie payments  Avith  the  issue  of  the  greenback,  and  we  can  not 
grow  back  again  except  by  the  retirement  of  the  greenback. 
This  seems  a.xiomatical. 

I  discard  the  thought  as  absurd  that  this  Government 
should  become  a  great  banking  institution,  holding  a  reserve 
of  three  or  four  hundred  millions  of  gold,  issuing  and  redeem- 
ing the  greenback.  Still,  the  "gradual  return  to  specie"  is 
a  favorite  phrase  with  the  Republican  orators;  it  is  supposed 
to  be  conservative  and  safe,  and  taking  with  prudent  people. 
Just  how  this  is  to  l»e  aceom[)lished  is  not  set  forth,  or  is 
clouded  in  the  still  more  vague  phi-ase  of  "growing  up"  to 


14  EESUMPTION. 


Specie  payments.  There  are  those  who  believe  we  may  "  grow 
up  "  to  gold  without  doing  anything,  or  retiring  the  green- 
back. Mr.  Pendleton  is  enamored  of  this  idea,  and  thinks 
that  we  may  again  and  again,  as  the  "  wants  of  trade  require," 
issue  more  and  more  greenbacks,  and  yet  all  the  while  be 
growing  up  to  specie.  That  is,  when  we  have  made  a  new 
issue  of  greenbacks  and  prices  have  adjusted  themselves  to 
the  inflated  currency,  and  stagnation  again  occurs,  we  may 
again  relieve  it  by  another  issue,  with  its  new  disturbance  of 
prices,  and  so  on.  That  is  what  is  meant  by  the  phrase  "the 
wants  of  trade."  Inflate  the  currency,  stimulate  trade  and 
expansion  of  credit ;  when  yiay  day  comes  issue  more  money 
and  enable  the  debtor  to  cheat  his  creditor.  Yet  Mr.  Pendle- 
ton, in  a  certain  sense,  is  right;  in  this  way  we  may  "grow 
up "  to  gold,  and  with  a  rapidity  unthought  of  by  him. 
American  credit  is  tainted  in  the  markets  of  the  world — the 
odor  of  repudiation  hangs  about  it.  This  taint  costs  us  two 
per  cent,  interest  on  all  our  vast  debt.  That  is,  if  the  confl- 
dence  of  the  world  in  our  integrity  was  equal  to  their  conti- 
dence  in  our  ability,  we  could  get  money  at  two  per  cent,  less 
than  we  now  do.*  To  this  taint  let  us  add  the  breach  of  faith 
of  issuing  greenbacks  in  excess  of  $400,000,000 ;  of  doing 
this  in  a  time  of  profound  peace,  to  meet  no  public  exigency, 
but  sup[)0sed  private  interests — accompanying  all  this  with 
the  public  declaration  that  the  promises  to  pay  thus  issued  do 
not  mean  what  they  say,  but  are  themselves  money,  made  so 
by  the  stamp  of  Government,  never  to  be  redeemed,  but  to 
be  added  to  from  timie  to  time  as  the  wants  of  trade  require. 
Let  all  this  be  done,  where  would  American  credit  stand  in 
the  presence  of  an  enlightened  Avorld?  Would  not  such 
an  act  shock  the  common  sense  and  moral  sense  of 
mankind  ?  Soon  our  bonds  would  be  hurried  home, 
and  sold  for  whatever  they  would  bring ;  the  American 
holder  would  catch  the  alarm  and  he  too  would  sell,  the 
panic  would  spread,  the  greenback  would  be  rejected  between 
man  and  man,  and  would  become  like  the  French  Assignat 
and  the  Confederate  note;  and  thus  on  the  Pendleton  theory 

*1875. 


I 


RESUMPTION.  15 


we  would  "  grow  up"  to  a  gold  basis  over  prostrate  National 
honor  and  amid  the  wrecks  of  a  fearful  financial  convulsion. 
This  is  one  way  of  reaching  a  gold  basis.  The  Republican 
I)arty  does  not  propose  to  do  this  ;  its  face  is  set  toward 
specie  resumption,  but  it  would  gradually  reach  that  end. 

Let  us  fully  and  fairly  examine  this  i)lan  ;  let  us  look  it  in 
the  face  and  ask  if  it  is  an  adequate  or  any  relief  to  the 
present  distress. 

I  do  not  stop  to  in(piire  into  all  the  causes  of  this  distress; 
there  are  two,  however,  conceded,  and  these  maiidy  hold  and 
promise  to  hold  in  the  future  upon  us  the  business  depression. 

There  can  be  no  prosperous  trade  in  the  presence  of  a  de- 
clining market;  men  will  not  buy  to  sell  when  they  must  sell 
at  a  less  price  than  they  paid.  There  will  be  no  production 
when  the  thing  produced  must  sell  for  less  than  the  cost  of 
production.  Prudent  traders  wait  until  the  bottom  is  reached. 
Now,  a  gradual  return  to  a  gold  basis  means  a  gradual  appre- 
ciation of  the  greenback  and  a  falling  market.  For  years 
past  we  have  had  a  declining  market,  caused  by  the  gradual 
appreciation  of  the  greenback.  It  is  true  that  in  the  last  two 
or  three  years  this  appreciation  of  the  greenback  has  been 
less  apparent  ;*  yet  during  all  this  time  men's  faces  were 
turned  toward  specie  resumption,  and  this  has  had  the  same 
effect  as  an  actual  appreciation  of  the  greenback.  We  dis- 
count the  effects  we  anticipate.  It  thus  appears  that  the 
gradual  appreciation  of  the  greenback — that  is,  a  gradual  re- 
turn to  specie  payments — has  produced  a  continuous  declining 
market,  and  is  thus  a  jiotent  cause  of  the  present  distress,  and 
one  that  will  maintain  that  distress  as  long  as  the  cause  con- 
tinues to  act — that  is,  until  actual  return  to  a  gold  basis. 

Thus  the  boasted  remedy  of  a  gradual  return  to  specie 
payments  is  not  only  no  remedy  at  all,  but  is  the  continuance 
of  the  very  cause  which,  has  contributed  so  largely  to  the  ex- 
isting business  depression. 

It  is  quite  true  that  upon  a  return  to  a  gold  basis  this  will 
cease  to  act;  and,  if  we  can  endure  the  suffering  meanwhile, 
all  may  yet  be  right..     But,  ah!  here  is  the  rub.     Can  the 

*1875. 


16  EESUMPTION. 


laborer,  with  liunger  at  his  door,  wait?  Can  the  thousands 
who  depend  upon  the  wheels  of  industry  being  kept  in  motion 
wait?  And  how  h)ng,  oh,  how  long  shall  they  wait?  If  the 
return  to  gold  is  to  be  through  a  gradual  rctiiienient  of  the 
greenback,  the  length  of  time  may  be  readil}-  estimated. 
But  if  we  are  to  grow  up  to  specie  payments,  with  an  irre- 
deemable currency  of  seven  hundred  millions,  who  can  tell 
when  we  shall  reach  it  ?  Shall  the  paralysis  of  business  re- 
main until  that  takes  place?  For  the  last  three  years  we 
have  made  no  progress  in  that  direction,  and  there  is  no  evi- 
dence that  we  are  now  making  any  progress.*  Surely  we  can 
not  make  any  while  there  is  a  large  party  clamoring  for  in- 
flation. Is  it  wise  statesmanship  that  postpones  relief  to  that 
distant  time  ?  May  not  a  sorely  distressed  i)COple,  meanwhile, 
through  sheer  despair,  Hy  to  inflation,  as  the  fevered  patient 
long  disappointed  with  regular  medicine  seeks  the  quack. 

We  have  from  the  Republican  speakers  able  expositions  of 
the  folly  and  wickedness  of  inflation;  but  these  speeches 
ignore  the  fact  that  a  gradual  return  to  gold  means  a  declin- 
ing market,  stagnant  trade,  laborers  without  emploj'ment, 
and  that  a  continnance,of  this  policy,  indeflnitely  means  an  in- 
definite prolongation  of  these  evils.  Yet  this  fact  is  "  the  dead 
point  of  danger ;"  the  fuel  wliich  the  clamorous  oratory  of  Gary 
fans  into  a  flame.  In  vain  cry  demagogue,  demagogue,  when 
you  furnish  him  the  material  for  his  incendiary  harangues. 
Gradual  return  to  specie  payments  is  a  slow,  wasting  disease; 
it  is  the  mercy  of  the  boy  who  cut  oft'  each  morning  an  inch 
of  his  dog's  tail  rather  than  cut  oft'  the  whole  at  a  single 
blow. 

But  further,  if  it  were  possible  to  return  to  gold,  "  to  grow 
up"  to  it  without  the  retirement  of  the  greenback,  it  would 
be  a  return  bringing  little  or  no  relief,  because  there  would 
be  no  assurance  of  its  permanence.  If,  under  favoring  cir- 
cumstances, the  increased  production  of  the  mines,  abundant 
crops  at  home,  failure  abroad,  diminished  importation,  in- 
creased exportation,  no  demand  abroad  or  at  home  for  gold, 

*  1875.  Since  then,  from  the  effect  of  the  resumption  act,  there  has 
been  progress;  but  if  this  be  repealed,  to  what  point  will  gold  advance? 
Who  can  tell  ? 


RESUMPTION.  17 


the  greoiiback  should  become  par  with  gold,  then  the  fact  re- 
mains that  under  unfavorable  conditions  it  would  grow  away 
from  gold.  If  the  greenback  may  grow  to  gold  it  may  grow 
away  from  it;  so  that  after  all  our  waiting  for  the  gradual 
return  to  gold,  apart  from  the  retirement  of  the  greenback,  it 
would  bring  us  no  relief. 

This  introduces  us  to  another  element  of  the  situation,  an- 
other cause  of  the  present  distress — the  uncertain,  fluctuating 
character  of  our  currency.  This  uncertainty  of  value  depends 
upon  two  circumstances.  The  pa[)er  dollar  has  no  intrinsic 
value,  only  fictitious.  Its  value  depends  upon  the  confidence 
of  the  public  in  its  ultimate  payment.  It  rises  and  falls  in 
value  with  the  rise  and  fall  of  this  confidence.  It  varies  with 
the  changing  hopes  and  fears  of  men.  All  this  takes  place 
when  the  volume  remains  the  same ;  but  here  enters  in  an- 
other element  of  uncertainty  :  the  ease  with  which  it  may  be 
indefinitely  increased.  iN'or  are  the  most  solemn  pledges  any 
security  against  this  increase.  There  is  always  a  large  class 
whose  interest  is  to  be  served  by  inflation — ^the  debtor  class. 
Besides  there  is  anothei-  cause  of  increase.  A  panic  may 
come.  Then  money  is  hoarded,  and  there  is  a  tight  money 
market.  If  this  occur  when  gold  is  the  currency,  the  world 
quickly  brings  relief  to  the  afflicted  country.  It  t,ends  its 
gold  there,  drawn  by  high  rates  of  interest,  and  soon  theie  is 
relief.  But  when  the  currency  of  a  country  is  irredeemable 
paper,  no  such  relief  can  come.  The  gold  may  come,  but  it 
is  not  there  mone}',  it  is  only  a  commodity.  There  is  no  way 
of  bringing  relief  to  such  a  country,  except  by  issuing  more 
of  the  paper,  and  this  process  repeats  itself  until  the  inevitable 
denouement  is  reached — the  repudiation  of  the  whole. 

In  the  last  ten  3'ears  we  have  seen  the  fluctuation  of  our 
currency  from  both  these  causes.  "Without  increase  of 
volume  there  has  been  a  fluctuation  of  forty  to  fifty  per  cent. 
It  is  true,  in  the  last  three  years  there  has  been  no  great  fluc- 
tuation, except  on  a  memorable  day  when  the  greenback, 
through  the  operation  of  a  gold  ring,  fluctuated  some  twenty 
per  cent.  This  incident  is  full  of  signiflcancc,  showing  upon 
what  a  precarious  basis  we  stand.  A  foreign  war,  domestic 
insurrection,  the  success  qf  the  iiaflation  policy,  and  away 


18  RESUMPTION. 


advances  the  premium  on  gold !  No  one  feels  quite  sure  what 
the  i)remium  on  gold  ma}-  be  a  week  hence.  All  this  without 
adding  anytliing  to  the  voUime  of  the  currency'.  When  the 
financial  panic  came  some  two  years  ago,  all  remember  how 
furious  was  the  demand  for  the  increase  of  the  currency. 
Even  men  trained  in  finance,  and  who,  in  their  sober  mo- 
ments, knew  better,  joined  in  the  clamor  for  inflation.  So 
it  would  be  to-day  had  we  another  panic — and  who  can  tell 
when  another  may  come  ?  The  whole  country  was  in  trepida- 
tion the  otlier  day  on  the  failure  of  Duncan,  Sherman  &,  Co., 
lest  it  would  bring  about  another  panic.  Had  this  taken  place 
the  number  of  inflationists  in  Ohio  would  have  been  greatly 
increased.  Now,  with  a  currency  so  full  of  uncertainty,  there 
can  be  no  permanent  revival  of  business.  Men  w-ill  not  en- 
gage in  adventure  or  in  new  enterprises  when  all  their  labor 
and  skill  may  come  to  naught  by  a  change  in  the  value  of  the 
currency.  •  With  a  policy  of  a  gradual  return  to  specie  pay- 
ments, the  uncertainty  becomes  much  greater,  and  co-ope- 
rating with  the  declining  fnarket,  produces  complete  stagna- 
tion. The  uncertainty  becomes  greater,  because,  as  we  ap- 
proach specie  payments,  and  the  stress  becomes  more  intense, 
there  is  danger  that  the  policy  of  gradual  or  a!iy  return  may 
be  abandoned.  Until  there  is  an  end  of  this  gradual  return, 
and  we  are  safely  anchored  on  a  gold  basis,  reached  by  the 
destruction  of  the  greenback,  there  can  be  no  relief. 

Is  it  not  then  entirely  clear  that  a  gradual  return  to  specie 
payments  means  a  continuance,  with  increasing  stress,  of  all 
the  evils  the  public  are  now  suffering?  Will,  then,  this  mode 
of  reaching  a  gold  basis  be  persevered  in,  unless  there  is  no 
other?  Happily,  such  is  not  the  case.  Why  procrastinate 
when  we  may  reach  our  end  at  once  ?  It  is  practicable  for 
the  Government  to  resume  now,  if  it  will  sink  the  greenback 
in  bonds.  Nor  is  it  necessary  to  retire  all  at  once.  Let 
enough  be  destroyed  to  bring  and  hold  the  balance  at  par, 
these  in  due  time  to  be  retired  and  destroyed. 

Perhaps  it  would  not  be  well  to  attempt  this  at  the  begin- 
ning of  the  present  business  season,  but  if  we  practice  a  wise 
statesmanship,  we  may  safely  reach  a  gold  basis  on  the  4th 
of  July  next — the  centennial  of  our  national  existence.    Why 


RESUMPTION.  19 


not?  There  is  only  one  objection  that  has  an}'-  force.  '  It  is 
said  this  would  be  oppressive  to  the  debtor;  that  it  would 
add  to  his  indebtedness  the  premium  on  gold,  and  that,  there- 
fore, we  should  proceed  gradually,  in  order  to  give  him  op- 
portunity to  adjust  his  affairs. 

For  the  moment  and  for  the  argument  let  us  admit  that 
immediate  resumption  would  add  the  gold  premium  to  the 
debtor's  indebtedness;  that  is,  at  this  time,  about  twelve  per 
cent.*  Should  this  deter  us  ?  We  are  not  now  addressing 
the  inflationist.  We  have  seen  that  inflation  enables  the 
debtor  to  defraud  his  creditor.  We  are  speaking  to  honest 
men,  who  believe  that  a  gold  basis  would  bring  prosperity, 
but  who  would  reach  that  end  gradually. 

Tlie  question  stands  thus  :  Shall  we  adopt  the  gradual  pro- 
cess, witli  distress  to  the  entire  community,  or  immediate  re- 
sumption, with  a  loss  of  twelve  per  cent,  upon  his  indebted- 
ness to  the  debtor?  Here  is  a  balancing  of  evils.  We  think 
we  understate  when  we  say  that  the  aggregate  loss  of  the 
depression  of  the  last  two  years  exceeds  many  times  the  twelve 
per  cent,  on  existing  individual  indebtedness.  Must  the  en- 
tire community  continue  to  suft'er  to  prevent  the  debtor's 
twelve  per  cent,  loss?  But  it  is  not  true  that  immediate  re- 
sumption adds  the  premium  on  gold  to  the  debtor's  indebted- 
ness. 

There  is  one  supposable  case  in  which  this  may  literally 
occur.  If  a  debtor  has  gold  he  may  to-day  sell  his  gold  for 
a  premium  of  twelve  per  cent.,  then  one  dollar  of  gold  will 
pay  one  hundred  and  twelve  cents  of  debt.  If  resumption 
take  place,  of  course  the  gold  dollar  would  only  pay  one 
dollar  of  indebtedness.  But  debtors  are  not  holders  of  gold; 
they  have  lands  and  goods  and  chattels  other  than  gold. 

These  they  must  sell  in  order  to  get  the  money  to  pay  their 
debts.  It  is  not  true  that  a  return  to  gold  would  reduce  those 
twelve  per  cent.  Many  of  them  would  not  be  reduced  at  all, 
and  some  but  little.  With  a  return  to  gold  by  the  contraction 
of  the  greenback,  there  would  be  at  first  and  for  a  short  time 
a  tight  money  market,  and  difliculty  to  realize   on   property. 


*1875. 


20  RESUMPTION. 


Eut  soon  the  gold  of  tlie  world  would  flow  in,  attracted  by 
the  high  rates  of  interest,  and  the  vacunni  created  by  the  re- 
tirement of  the  greenbacks  wonld  be  tilled.  And  now,  hav- 
ing reached  bottom,  there  won  hi  be  no  fear  of  a  further  de- 
cline, but  a  feeling  of  security  and  safety.  This  would  stim- 
ulate enterprise,  and  soon  prosperity  would  return.  All  this 
would  prevent  a  great  decline  in  prices,  and  with  returning 
prosperity  the  debtor  would  be  enabled  to  pay  his  debts,  or  if 
his  property  were  forced  to  sale,  it  would  bring  better  prices 
than  to-day.  No  one  is  more  interested  in  returning  prosperity 
than  the  debtor,  and  no  one  would  be  more  benelited  by  a  re- 
turn to  gold  than  he.  If,  however,  there  is  doubt  about  this, 
surely  it  is  possible  to  scale  the  debt  with  reference  to  the 
gold  premium  in  such  a  manner  as  to  work  substantial  jus- 
tice. 

The  debtor  question  presents  no  insurmountable  barrier  to 
immediate  resumption,  and  there  is  none  other. 

Earnestly  desiring  the  success  of  the  Republican  ticket,  I 
have  yet  felt  that  it  has  given  its  adversary  an  advantage ; 
that  on  a  certain  and  important  aspect  of  the  financial  ques- 
tion it  occupies  an  untenable  position.  A  gradual  return  to 
a  gold  basis  is  no  remedy  for  existing  evils,  as  in  the  past 
gradual  emancipation  was  no  remedy  for  slavery.  A  gradual 
return  is  impracticable;  the  country  will  not  bear  the  exhaust- 
ing strain.  Better  remain  where  we  are,  facing  neither  gold 
nor  inflation,  if  this  were  possible.  Yet  we  shall  reach  a  gold 
basis.  We  can,  in  a  regular  way,  with  advantage  to  all,  with 
sustained  and  advanced  national  honor.  If  it  must  be  other- 
wise, still  we  shall  reach  a  gold  basis,  if  it  be  over  broken 
faith  and  amid  destructive  commercial  convulsion. 


A    MONEY    PANIC.  21 


A  MONEY  PANIC 

WUEN   IRREDEEMABLE    PAPER   IS   THE    MONEY. 

October  25,  1875. 

I  go  a  step  further,  and  affirm  as  the  hiw  of  its  being,  that 
the  well  working  of  an  irredeemable  currency  requires  peri- 
odical inflation.  I  am  aware,  in  asserting  this,  that  this  re- 
peated inflation  will  ultimate  in  the  collapse  and  ruin  of  the 
whole.     This  is  also  the  law  of  its  being. 

The  wit  of  man  has  never  devised  a  monetary  system  that 
prevents  the  occurrence  of  money  panics,  nor  is  it  likely  to 
do  so  hereafter.  Money  panics  grow  out  of  the  nature  of 
man,  a  nature  which  he,  in  this  respect,  shares  with  other  gre- 
garious animals — a  tendency  or  liability  to  stampedes. 

The  wise  legislator  recognizes  this  fact,  and  in  devising  his 
monetary  s^^stem,  seeks  to  frame  one  that,  while  it  may  not 
prevent  panics,  will  yet  reduce  their  evils  to  a  minimum. 

Experience  has  shown  that  panics  do  not  occur  in  every 
country  at  the  same  time.  They  are  generally  local  or  con- 
fined to  a  single  nation.  Experience  has  also  shown  that 
when  the  money  of  the  country  aftlicted  with  a  panic  is  the 
same  as  that  of  the  rest  of  the  world,  relief  comes  quickly. 
While  the  panic  exists  money  is  hoarded,  and  those  who  want 
it  can  not  get  it.  Interest  rapidly  rises.  This  attracts  the 
attention  of  nations  not  affected  by  the  panic.  "  Their  heads 
are  level."  They  know  there  is  property  of  value  in  the 
afilicted  country  that  is  good  security  for  loans.  They  hasten 
their  money  there.  This  brings  some  relief.  Those  hoarding, 
seeing  foreign  money  coming,  regain  confidence  and  bring  out 
their  hidden  and  unproductive  treasures.  Soon  there  is  a 
plethora  where  there  was  a  famine,  the  panic  is  over,  and  the 
superabundant  money  flows  elsewhere,  where  it  is  wanted. 

All  this  is  happily  illustrated  by  the  recent  panic  in  San 
Francisco,  which  is  on  a  gold  basis.     There  was  a  panic,  a 


22  A    MONEY   PANIC. 


hoarding  of  money.  A  flow  of  gold  there  bronght  relief,  and 
now,  as  we  write,  the  telegraph  announces  the  shipment  of 
gold  east.  All  is  over.  This  is  the  action  when  gold  is  the 
currency. 

But  suppose  the  panic  occurs  in  a  country  having  an  irre- 
deemable currency.  There  is  a  hoarding  of  this  currency. 
Men  are  alarmed  and  hold  that  which  everybody  wants. 
Interest  rises,  but  the  rising  scale,  instead  of  bringing  relief 
only  measures  the  degree  of  alarm  and  augments  the  dispo- 
sition to  hoard.  The  world  can  bring  no  relief.  Countries 
where  the  i)anic  does  not  exist  have  none  of  the  irredeemable 
stuff",  only  gold.  This  will  bring  no  relief,  for  the  gold  is  not 
currency  there,  and  will  only  add  another  commodity,  to  be 
carried  by  the  currency.  There  is  no  relief  to  a  panic  in  a 
country  with  an  irredeemable  currency,  either  from  within  or 
without.  Those  who  have  the  money  hoard  it,  those  who 
need  it  can  not  get  it.  The  great  manufacturers,  with  their 
thousands  of  employes,  requiring  their  weekly  paj-ments,  can 
not  get  the  money.  Those  who  are  in  debt  can  not  get  the 
money  to  pay  their  creditors,  and  their  property  is  subjected 
to  ruinous  sacrifices.  Upon  all  these  the  hoarding  of  the 
money  operates  like  a  corner  in  stocks  does  upon  the  "  shorts." 
The  question  arises,  shall  these  manufacturers  and  their  em- 
ployes and  the  debtors  all  be  brought  to  ruin,  or  shall  the 
Government  come  to  their  relief  in  the  issue  of  more  irre- 
deemable currency  ?  If  enough  of  this  is  issued  it  will  bring 
temporary  relief.  It  will  operate  as  the  influx  of  gold  upon 
a  countr}'  on  a  gold  basis.  When  the  hoarder  sees  that  the 
Government  is  issuing  more  currency  and  thus  decreasing  the 
value  of  what  he  hoards,  he  will  cease  to  hoard  and  seek  to 
get  rid  of  the  depreciating  thing. 

It  is  thus  seen  that  the  demand  of  the  debtor  and  the  manu- 
facturer for  inflation,  in  a  panic,  in  a  country  with  an  irre- 
deemable currency,  is  a  perfectly  natural  one.  Under  such 
circumstances  there  is  always  a  tierce  clamor  for  inflation. 

This  was  conspicuously  so  in  the  panic  of  1873,  and  pro- 
duced a  partial  inflation,  but  not  enough  to  bring  relief,  and 
there  is  no  relief  yet. 

When  the  question  is  between  the  hoarder  on  the  one  hand 


I 


I 


A   MONEY   PANIC.  23 


and  the  suftbring  manufacturer  and  debtor  on  tlie  otlier,  the 
Government,  which  by  creating  an  irredeemable  curi-ency, 
has  placed  the  latter  at  the  mercy  of  the  former,  must  and 
ought  to  come  to  the  relief  of  the  sufferers,  in  the  further 
issue  of  paper,  if  it  will  not  return  to  the  true  and  lasting 
remedy — a  gold  basis. 

So  the  continued  maintenance  of  a  legal  tender,  inconverti- 
ble i:)aper  currency,  necessarily  involves  periodical  inflations 
with  inevitable  ultimate  ruin. 


24  MATTHEWS   ON    MONEY, 


MATTHEWS  ON  MONEY. 

August  9,  1877. 
If  we  can  reach  the  meaning  of  Matthews  amid  his  multi- 
tude of  words,  his  involved  sentences,  and  his  primary  and 
ancillary  propositions,  liis  linancial  scheme  seems  to  embody 
every  financial  heresy  that  has  in  these  latter  years  vexed  our 
currency-distracted  land.     And  yet  there  are  some  good  points 

also — 

"Black  spirits  and  white,  blue  spirits  and  gray, 
Mingle,  mingle,  mingle." 

lie  proposes  to  pay  the  customs  in  greenbacks — to  cut  the 
last  cord  that  binds  the  country  to  gold ;  to  place  the  Govern- 
ment wholly  at  the  mercy  of  the  gold  bulls  of  Wall  street. 
And  for  what?  "And  thus  (the  greenbacks)  be  made  equal 
in  value  to  gold  !" 

Here  is  the  germ  of  all  our  woe,  the  seminal  heresy,  the 
belief  that  an  edict  of  Cono:ress  can  make  a  rac;  srold.  No 
doubt  the  importer  would  pay  duties  in  greenbacks — would 
sell  his  gold  and  buy  the  greenbacks.  The  greater  the  pre- 
mium on  gold  the  better  for  him  and  the  worse  for  the  Gov- 
ernment.    It  would  be  to  his  interest  to  bull  gold. 

And  thus  the  great  importing  interest  would  be  arrayed 
against  the  Government.  Now  it  is  on  the  side  of  the  Gov- 
ernment; the  less  the  premium  on  gold,  the  better  for  it  and 
also  the  Government.  Judge  Matthews  would  reverse  this 
condition  of  things.  Were  such  a  law  passed,  the  shock  to 
credit  would  be  so  great  that  the  jTremium  on  gold  would 
rise  ten  or  fifteen  per  cent.  This  proposition  is  not  novel. 
Every  scheme  of  the  Democracy  during  the  last  twelve  years, 
looking  to  repudiation,  has  had  in  it,  in  a  prominent  place, 
the  proposition  to  pay  the  customs  in  greenbacks.  But  this 
is  the  first  time  it  has  been  proposed  by  a  responsible  Repub- 
lican. 

The  Judge  says  : 

"And  in  regard  to  this  it  is  one  of  the  express  provisions  of  the  scheme. 


MATTHEWS   OX   MONEY.  25 

that  the  requisite  paper  circulation,  based  on  the  credit  of  the  Govern- 
ment, strictly  limited  by  hivv  as  to  its  maximum  issue,  can  and  ought  then 
to  be  maintained  at  its  par  with  coin,  and  so  made  and  kejit  exchange- 
able with  coin  on  demand.  Precisely  what  further  legislation,  if  any, 
would  be  necessary  to  establish  and  maintain  this  status  is  not  stated ; 
but  an  obvious  one,  that  would  perfectly  answer,  would  be  to  give  to  the 
holders  of  greenbacks  the  option,  within  prescribed  limits  as  to  amounts 
and  times,  to  exchange  them  for  a  long  bond  or  a  perpetual  annuity  V^ear- 
ing  an  interest  not  to  exceed  3.G5  per  cent,  per  annum.  This  would  ab- 
sorb all  redundant  paper  circulation  and  maintain  its  etjuilibrium  with 
gold  and  silver  coin. 

"  The  main  thing  is  to  resume  specie  payments.  That  means,  not  to  dis- 
pense with  the  use  of  paper  money,  but  to  make  it  and  keep  it,  all  the 
time,  equal  in  value  with  gold  and  silver  coin.  The  two  in<lispensablc 
conditions  are  to  restore  silver  and  give  to  paper  money  the  same  utility 
as  coin,  by  putting  them  all  on  a  perfectly  equal  footing  before  the  law. 
When  that  is  done,  we  have  resumed  specie  payments;  until  that  is  done, 
we  have  not,  notwithstanding  we  say  by  statute  tliat  we  will  or  that  we 
have  done  so.  When  we  have  estaljlished  the  conditions  on  which  the 
interconvertibility  of  paper  and  coin  depend,  we  have  made  them  intei*- 
convertible,  and  that  is  resumption." 

This  is  hazy.  Clear  thought  shoukl  receive  clear  expres- 
sion, but  here  both  are  wanting.  Still,  projecting  through 
the  fog,  like  ugly  craters,  is  clearly  visible  a  whole  group  of 
unseemly  heresies. 

It  has  ever  been  supposed  that  the  business  of  Government 
was  to  coin,  not  to  make  money.  The  war  necessity  seemed 
to  create  an  exception,  and  the  greenback  appeared.  It  was 
still  supposed  that  this  would  pass  away  with  the  necessity 
which  created  it.  But  now  the  Judge  seems  to  contemplate 
this  as  a  permanent  part  of  the  currency,  "  strictly  limited  by 
law  as  to  its  maximum."  Ah,  Judge,  may  not  the  law  of  one 
Congress  be  changed  by  the  law  of  another?  The  volume 
of  gold  and  silver  is  fixed  by  the  irreversible  law  of  nature, 
but  you  would  adopt  a  currency  whose  volume  depended  upon 
the  exigencies  of  a  Senatorial  canvass.  From  this  evil,  good 
Lord,  deliver  us ! 

The  Judge  revives  the  bankrupt  3.65  bond  scheme  of  Kel- 
ley — a  cunningly-devised  scheme  whereby  the  idle  money  of 
the  rich  will  draw  interest  from  the  people  through  call  loans 
to  the  Government  that  does  not  want  the  money,  whereby 
the  creditor,  lending  his  mone}''  on  call  to  the  Government, 


26  MATTHEWS    ON    MONEY. 


can  oppress  tlie  debtor  by  refusing  to  lend  to  him  at  low 
rates;  whereby  in  a  money  panic  the  capitalist  can  hoard  up 
his  money  in  the  Government  vaults  on  interest,  bringing  no 
relief  to  the  country,  and  whereby  the  capitalist  can  increase 
or  diminish  the  volume  of  currency  at  his  will. 

From  this  evil,  good  Lord,  deliver  us! 

But  tlie  most  marvelous  thing  in  this  remarkable  document 
is  the  closing  sentence  :  "  When  we  have  established  the  con- 
ditions on  which  the  interconvertihility  of  paper  and  coin  de- 
pend, we  have  made  them  interconvertible,  and  that  is  resump- 
tion." [The  italics  are  mine.]  Here  is  introduced  a  new 
word  of  ominous  import.  "Interconvertihility"  is  found  in 
no  dictionary,  it  is  of  base  coinage;  it  is  the  work  of  the 
Democratic  Convention.  AVe  know  what  convertible  and  in- 
convertible paper  are  ;  we  know  paper  can  not  be  kept  at  par 
with  ffold  unless  it  is  convertible  at  the  will  of  the  holder 
into  gold. 

But  what  is  "interconvertible  paper?"  We  .gather  from 
what  Matthews  says,  that  the  legerdemain  of  legislation  may 
create  a  currency  of  rags,  silver,  and  gold,  "  equal  before  the 
law,"  in  which  neither  is  convertible  into  the  other,  for  then 
they  would  not  be  equal  before  the  law,  but  yet  that  each 
would  be  equal  to  the  other — a  sort  of  triune,  mammon  head 
of  three  persons — rags,  silver  and  gold;  equal  in  substance, 
power  and  glory — a  worthy  object  of  our  worship,  or  rather 
that  unseemly  monster  the  creature  of  the  imagination  of 
the  Heathen  poet : 

"  Humano  capiti  cervicem  pictor  equinam, 
Jungere  si  velit,  et  varias  inducere  plumas 
Undique  collatis  membris,  lit  turpiter  atrum 
Desinat  in  i)i.sceiu  mulier  formosa  superne  : 
Spectatuin  admissi  risum  teneatis,  amici?" 

Let  us  laugh,  but  from  this  monster,  good  Lord,  deliver  us. 

We  have  not  exhausted  the  heresies  of  this  extraordinary 
Senatorial  pronunciamento  ;  but  we  fear  we  have  exhausted 
the  patience  of  your  readers. 

One  folly  the  Judge  has  escaped,  though  perhaps  his  plan 
comes  to  that.      It  was  reserved  to  the  Gazette  and  Judge 


I 


MATTHEWS   ON    MONEY.  27 

West  to  proclaim  as  the  shihholeth  of  tlie  canvass  tlie  words, 
"no  contraction,  no  expansion,  no  depreciation." 

If  you  can  not  cure  the  patient,  soothe  hiiu  \\ith  an  anodyne 
that  will  at  least  dull  his  sensibilities.     Fatal  delusion! 

Confessedly,  questions  of  finance  arc  complex  and  abstruse  ; 
yet  there  are  some  things,  which  coming  continually  uiuler 
their  observation,  the  merchants  and  manufacturers  ought  to 
understand.  What  is  the  matter  with  trade  now?  Stagna- 
tion. What  mainly  causes  this?  Uncertainty.  How? 
When  a  project  of  importance  comes  before  the  merchajit  or 
manufacturer,  the  harrowing  inquiry  confronts  him,  AVhat 
W'ill  be  our  currency?  Shall  we  go  forward  to  resumption, 
stand  still,  or  go  back  to  inflation?  Which?  The  more  he 
ponders  the  more  he  doubts.  In  the  Babel  clamor  of  schemes 
there  is  confusion  worse  confounded.  The  project  is  dropped. 
Thus  a  slow,  dry  rot  is  consuming  our  business  life. 

Let  us  lift  the  business  of  the  country  out  of  this  slough  of 
suspense.  There  is  but  one  way — we  must  remove  the  un- 
certainty which  produces  it;  we  must  retire  the  greenbacks 
and  resume  specie  payments.  All  admit  this  must  be  done 
sooner  or  later.  Why  not  now?  The  Gazette  says  that 
in  1837  the  collapse  of  the  paper  and  return  to  gold  bank- 
rupted the  country ;  that  resumption  now  will  produce  a  like 
result;  that  we  must  wait  for  better  times  and  then  resume. 
All  this  is  fallacious.  There  is  no  analogy  between  our  posi- 
tion noAv  aud  in  the  panic  of  1837.  Then,  in  a  single  day,  a 
vast  paper  inflation  colla}»sed,  bringing  inflation  prices  in- 
stantaneously down  to  gold,  without  any  expectation  of  such 
an  event,  and,  of  course,  without  any  preparation  therefor. 
The  fall  of  prices  was  ruinous  to  the  debtor  class,  and  through 
it  brought  ruin  upon  all.  Far  different  is  the  present  situa- 
tion. Through  these  long,  weary  ^^ears  we  have  been  ap- 
proaching a  gold  basis,  arc  almost  there,  hax'C  already  dis- 
counted its  etfects.  Prices  and  wages  are  now  not  higher 
than  in  the  gold  days  of  1860.  Were  all  our  paper  destroyed 
to-day  it  would  not  sensibly  affect  prices.  There  would  be 
temporary  inconvenience.  Soon  this  would  pass  away.  The 
ffold  of  the  world  would  flow  to  us.  Confldence  would  be 
re-established.     The  capitalist  would   know  we  were  at  the 


28 


MATTHEWS   ON    MONEY. 


bottom,  all  uncertainty  would  be  removed.  lie  would  put 
his  capital  in  banking.  Soon  there  would  be  a  plethora  of 
gold  and  silver  and  convertible  paper — not  interconvertible 
moonshines.  Prosperity  would  revive.  So  far  from  1879 
being  too  soon  to  resume,  it  is  too  late.  It  is  a  dreadful 
thought  that  we  are  to  have  another  weary  year  of  stagna- 
tion. We  ought  to  have  resumed  this  summer.  Perhaps  it 
is  not  wise  to  resume  now,  at  the  opening  of  the  business 
season,  but  we  should  resume  next  year.  The  greenback 
must  be  sunk  in  the  bond.  Let  Congress  authorize  this.' 
The  Gazette  says.  Wait  for  better  times  and  then  resume.  But 
what  are  better  times?  High  prices  and  rising,  high  wages 
and  rising?  Contraction  then  is  to  bring  these  down  and  to 
bring  the  disasters  of  1837.  The  opportune  moment  for  re- 
sumption is  in  the  hour  of  extremest  depression — now  is  the 
accepted  time. 

It  is  a  melancholy  reflection  that  we  have  endured  the  pain 
of  resumption  and  the  boon  is  about  to  escape  us. 

Courage,  John  Sherman,  courage;   force   resumption   and 
your  name  will  fill  a  higher  niche  than  that  of  Hamilton. 


TAFT   AND   GllOESBECK    ON    SILVER.  29 


TAFT  AND  GROESBECK  ON  SILVER. 

September  23,  1877. 

The  very  able  speeches  of  Messrs.  Taft  and  Groesbeck  are 
full  of  valuable  iuforniation  ;  but  do  not  solve  the  vexed  and 
vexing  question  as  to  the  remonetization  of  silver  on  the  old 
basis. 

The  argument  for  remonetization  (in  their  o[)inion  con- 
clusive) is  that  it  will  repair  the  wrong  done  in  1873-4  to  the 
debtor,  in  the  demonetization  of  silver.  It  is  said  that  de- 
crease of  the  volume  of  money  increases  the  value  of  the  dol- 
lar, and,  to  that  extent,  imposes  a  burden  upon  the  debtor; 
that,  therefore,  the  withdrawal  of  silver  from  the  currency 
(reducing  its  volume)  imposed  an  additional  burden  upon  the 
debtor,  which  is  measured  by  the  present  difference  between 
gold  and  silver — that  is,  ten  per  cent.,  gold  being  at  par,  and 
silver  ninety.  Admitting,  for  the  sake  of  argument,  all  this 
to  be  true,  what  is  the  remedy  ? 

The  silver  men  propose  the  remonetization'  of  silver.  They 
claim  that  increase  of  the  volume  of  money  will  decrease  the 
value  of  the  dollar,  and  to  that  extent  benefit  the  debtor  ; 
that  restoring  silver  to  the  currency  will  replace  things  as 
they  were,  and  undo  the  wrong  done  by  its  displacement. 

It  will  be  observed  that  if  demonetization  injured  the 
debtor,  it,  to  the  like  extent,  benefited  the  creditor,  and  like- 
wise, if  remonetization  will  benefit  the  debtor,  it  will,  to  the 
like  extent,  injure  the  creditor;  and  in  this  way,  it  is  claimed, 
the  wrong  done  the  debtor  in  1873-4  may  be  corrected  in 
1877. 

This  is  the  argument,  as  we  understand  it,  for  remonetiza- 
tion. Admitting  all  its  assumptions  to  be  true,  is  it  yet  con- 
clusive ?  It  would  be,  if  the  debtor  and  creditor  of  to-day 
were  the  debtor  and  creditor  of  1873-4,  the  obligations  also 
being  the  same.  But,  alas !  for  the  argument,  this  is  not  so. 
Four  years  of  a  busy  world  have  made  infinite  changes  of  ob- 
ligations,   and   in   the  relations    of    debtors   and    creditors. 


30  TAFT   AND   GROESBECK   ON    SILVER. 


Debtors  four  years  ago,  have  paid  their  debts  with  the  in- 
creased burden  caused  by  the  demonetization  of  silver,  and 
are  now  creditors,  and  as  such,  to  suiicr  ag-ain  if  silver  be  re- 
monetized.  Creditors  of  four  3^ears  ago,  who  realized  on  the 
advance  made  by  demonetization,  are  now  debtors,  to  reap  a 
second  gain  if  silver  be  remonetized.  Millions  of  govern- 
ment bonds  have  changed  hands  in  these  four  years — the 
present  holders  having  paid  for  them  at  the  increased  price 
caused  by  demonetization.  Is  it  honest  for  the  Government 
now  to  remonctize  silver  to  the  loss  of  those  men  wlio  have 
bought  the  bonds  of  the  Government,  on  the  faith  of  the  Gov- 
ernment given  to  them  in  the  act  demonotizing  silver? 

It  is  said  that  the  general  acts  authorizing  these  bonds  gave 
the  Government  the  option  to  pay  them  in  gold  or  silver. 
Granted.  But  has  not  the  Government,  in  its  act  demonetizing 
silver,  exercised  this  option,  and  thus  notified  all  the  world  that 
it  would  pay  the  bonds  in  gold  ?  Has  not  the  world  acted  upon 
this  assumption?  Has  not  business  adjusted  itself  to  this 
condition  of  things,  whereby  gold  is  par  (100),  paper,  in  the 
expectation  of  resumption  and  gold  payment,  96  and  more, 
and  silver  92  ?  Is  it  right  for  the  Government  now  to  inter- 
fere arbitrarily  and  change  the  status  which  its  own  action 
has  produced,  to  knock  the  currency  topsy-turvey,  and  pro- 
duce confusion  and  consequences  which  no  man  can  foresee  ? 
May  the  Government,  in  the  exercise  of  its  option  to  pay  gold 
or  silver,  or  botli,  to-da}'  pay  in  gold,  to-morrow  in  silver,  next 
day  in  both,  and  then  reverse  all  this? 

Mr.  Editor,  is  it  re[)aration  of  a  wrong  to  punish  the  inno- 
cent creditor  of  to-day  because  wrong  was  done  to  the  debtor 
of  four  years  ago  ? 

This  is  the  question  which  neither  Mr.  Taft  nor  Mr.  Groes- 
beck  has  answered.  l!^ay,  they  have  not  paid  to  it  even  "  the 
cold  respect  of  a  passing  glance." 

Atid  yet  it  is  a  vital  question.  The  government  may  not 
with  impunity  commit  such  an  act  of  gross  immorality. 

It  may,  to  preserve  the  life  of  the  Nation,  issue  the  green- 
back, and  rob  the  creditor  of  a  third  or  lialf  of  his  debt.  But 
it  may  not  in  the  hour  of  peace  and  safety  rob  the  confiding 
creditor  of  to-day  because  some  four  years  ago  in  its  folly  it 


TAFT   AND   GROESBECK   ON    SILVER.  31 

may  be  it  rol)bc(l  tlio  debtor  of  that  clay.  It  may  not  to-day 
pay  oft"  with  silver  the  men  who  yesterthi}'  f>;avo  Ihaxr  rj old  for 
the  four  per  cent,  bonds.  Such  an  act  would  sliock  the  moral 
sense  of  the  world  and  shake  the  fabric  of  our  credit  to  its 
foundations. 

But  it  is  said  that  remonetization  would  somewhat  advance 
silver  and  somewhat  reduce  gold,  and  thus  bring  them  to  an 
equality,  so  that  even  if  the  creditor  were  jjaid  in  silver,  he 
could  get  with  it  gold,  if  he  preferred  it,  and  without  loss, 
and  thus  he  would  not  feel  the  wrong  done  him  in  the  depre- 
ciation of  gold  caused  by  the  use  of  both  metals  as  money. 
This  argument  tacitly  assumes  that  the  demonetization  of  sil- 
ver by  the  United  States,  was  the  sole  cause  of  its  dei)recia- 
tion.  But  this  is  not  the  fact ;  other  factors  were  in  this  Avork 
— the  demonetization  of  silver  by  German}^  and  other  nations, 
the  diminished  demand  for  it  in  the  East,  and  the  increased 
production  of  the  mines.  These  other  and  more  power- 
ful factors  remaining  in  operation,  is  it  not  idle  to  assume 
that  the  demonetization  of  silver  by  the  United  States  alone, 
would  bring  it  to  par  with  gold  ?  And,  in  so  far  as  it  did 
not,  would  not  the  payment  by  it  of  debts  be  to  that  extent 
robbery  of  the  creditor — plain,  palpable,  visible,  aggravating 
repudiation  ? 

The  question  of  the  remonetization  of  silver  is  larger  than 
"the  creditor  and  debtor  question,"  and  so  the  silver  men 
recognize  it.  The}^  claim  that  silver  is  necessary  to  resump- 
tion. Let  us  see.  All  well  informed  people  know  that  re- 
sumption can  only  take  place  and  be  maintained  by  the  I'ay- 
ment  and  destruction  of  the  greenback,  or  by  hoarding  a  suf- 
iicient  amount  of  money  to  pay  it  on  presentment.  Where 
is  this  money  to  come  from?  It  can  only  be  obtained  by  the 
sale  of  bonds.  The  resumption  act  permits  for  this  purpose  the 
sale  of  bonds  bearing  4  or  4i  or  5  per  cent,  interest,  the  num- 
ber of  each  class  being  limited.  The  number  of  5  })er  cent, 
allowed  may  have  already  been  issued.  As  to  this  1  am  not 
advised.  If  so,  the  bonds  must  be  4  or  41  per  cent.  This  is 
for  us  a  low  interest.  Such  bonds  were  never  before  sold 
here.  It  is  only  in  an  exceptional  condition  of  things  that 
they  are  salable. 


32 


TAFT   AND   GROESBECK   ON   SILVER. 


First  of  nil,  our  credit  must  be  good.  It  is  this  which  has 
enabled  us  to  sell  these  bonds.  Any  taint  u})on  our  credit,  up 
goes  the  interest.  Will  remonetization  of  silver  on  the  old  basis, 
unlimited,  affect  our  credit?  This  can  only  be  a  matter  of 
opinion.  But  if  we  now  force  upon  the  creditor  of  to-da}'' 
silver  in  payment  of  that  for  which  he  paid  gold,  if  we  send 
to  the  German  silver,  a  metal  discarded  iu  his  country,  in 
payment  of  bonds  upon  which  he,  for  sixteen  years,  has  been 
getting  gold,  which  have  there  in  all  these  years  been  bought 
and  sold  as  gold  bonds,  what  will  he  think  of  our  credit? 
"What  will  the  bondholders  of  England,  in  like  situation, 
think  ?  Will  they  not,  will  not  Europe  think  that  the  pay- 
ing of  these  bonds  in  silver,  when  it  is  at  a  discount,  measured 
by  gold,  is  an  act  of  bad  faith  ? 

Will  not  the  cry  of  American  repudiation  ring  through  the 
Exchanges  of  the  world  ?  And  whether  this  be  in  itself  right 
or  wrong,  will  not  this  cry  be  the  death  knell  of  American 
credit  ? 

Soon  the  to  them  tainted  paper  will  be  hurried  home  in 
great  ship  loads.  Then,  when  there  is  a  throng  of  six  per 
cent,  bonds  in  our  markets,  when  our  finances  are  in  collapse, 
what  chance  will  there  be  of  floating  a  4  or  4|  per  cent,  bond  ? 
It  requires  no  seer  to  foresee  that  the  full  remonetization  of 
silver,  with  all  that  it  implies,  will  be  fatal  to  resumption. 

And  for  what  have  we  tarnished  our  fair  name?  That  we 
may  pay  our  bonded  debt  in  depreciated  money  !  How  much 
would  we  gain  by  it  ?  I  have  not  before  me  the  data,  but 
Mr.  Ewing — not  a  good  authority — says  the  gold  interest 
sent  abroad  on  our  debts  is  one  hundred  and  lifty  millions. 
The  silver  men  claim  that  the  remonetization  of  silver  would 
bring  down  gold  live  per  cent,  and  advance  silver  five  per 
cent.,  both  meeting  at  ninety-five  per  cent. — a  gratuitous 
assumption,  as  we  have  seen.  But  admitting  it,  then  the 
new  money  would  be  five  per  cent,  cheaper  than  the  present 
money  (gold).  In  payment  of  the  one  hundred  and  fifty 
millions  of  interest  in  the  cheap  money,  we  would  save 
seven  and  a  half  millions  annually,  I  do  not  know  what 
part  of  the  hundred  and  fifty  millions  of  interest  is  from 
the  six  per  cent,  bonds,  but   perhaps   one-half,  seventy-five 


TAFT   AND   GROESBECK   ON    SILVER.  33 

millions.  I^ovv,  if  tliese  bonds  are  merged  in  four  per  cent, 
bonds,  we  shall  save  yearly  twenty-five  millions  of  interest. 
If  remonctizution  defeat  resum[>tion  and  the  sale  of  fonr  per 
cent,  bonds,  then  by  it  we  save  yearly  seven  and  half  millions 
and  lose  twenty-tive  millions,  a  net  loss  of  seventeen  and  a 
half  millions. 

So  we  liavc  lost  onr  credit  and  made  no  money  by  it. 

We  are  a  debtor  IsTati on.  It  is  our  interest  to  maintain  our 
credit.  High  credit  means  low  interest,  low  credit  high  inter- 
est. Even  the  doing  of  a  thing,  right  in  itself,  if  it  will  tend 
to  taint  our  credit,  is  highly  inex[)edient. 

The  path  of  honor  and  safety  is  plain  before  us:  let  us  in 
the  future,  as  in  the  past,  move  steadily  forward  to  resump- 
tion, keeping  our  standard  "  full  high  advanced,"  not  a  stain 
or  blot  on  its  escutcheon. 

There  is  a  plausible  a[ipeal  to  our  patriotism  :  "  Have  we 
not  a  large  debt  held  abroad?  Are  we  not  a  silver-producing 
country,  and  shall  we  deprive  ourselves  of  this  silver  for  the 
payment  of  our  debts?"  In  the  same  strain  it  is  said  we 
need  the  whole  volume  of  gold  and  silver  for  resumption. 

Those  who  speak  tlius  seem  to  thiidc  we  can  not  use  our 
silver  in  payment  of  debts  oi"  in  aid  of  resumption  if  it  is  not 
monetized — that  it  has  no  value  and  is  of  no  use  if  not  made 
money.  But  the  fact  is  that  every  dollar  of  silver  we  mine 
to-day  ma\-  pay  92  cents  of  debt  or  buy  92  cents  of  gold  for 
resumption.  Whatever  we  produce  that  sells  abroad  may 
pay  our  del)t  or  buy  gold  for  resumption. 

The  monetization  of  silver,  on  the  old  basis,  would  to-dav 
pay  at  most  only  8  per  cent,  more  of  debt,  but  it  would  not 
help  resumption.  For  while  it  would  draw  to  us  more  silver, 
it  would  necessarily  drive  out  the  dearer  gold.  We  can  not 
have  a  currency  of  gold  and  silver  with  unlimited  coinage  of 
each.  Tlio  relation  of  value  between  them  is  not  constant, 
but  shifting,  and  the  cheaper  drives  out  tlie  dearer  as  paper 
drives  out  both.  The  dream  of  a  gold  and  silver  currencv 
at  the  same  time  has  not  been  realized.  The  one  or  the  other 
flies  from  us  when  the  coinage  of  each  is  unlimited. 

So  in  its  last  analysis  the  silver  question  resolves  itself  into 
a  pro])Osal  to  substitute  a  silver  for  a  gold  currencv,  and  in 


34  TAJT   AND   GROESBECK    OX    SILVER. 


the  operation  to  cheat  the  creditor  out  of  8  per  cent,  of  his 
debt.  Standing  midway  between  the  advancing  civilization 
of  Europe  and  tlie  retrograde  civilization  of  the  east,  with 
free  choice,  we  step  down  to  the  lower  [)lane  and  close  up  ranks 
with  the  Chinaman,  preferring  the  bulky,  cumbersome,  shift- 
ing, cheap  silver,  to  the  denser,  stabler,  dearer  gold  !  "  You 
pay  your  money  and  you  take  your  choice!" 


UC  SOUTHERN  REGIONAL  LIBR/H . 

I|!|  I   Mill:      ,1    III      <L 


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